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Hold TCS, target of Rs 564: Indiabulls Securities
Indiabulls Securities Research has downgraded its rating on Tata Consultancy Services to hold with a target price of Rs 564. For Q2’09, Tata Consultancy Services (TCS) registered modest earnings. Revenues went up by 8.5% sequentially.
Indiabulls Securities Research has downgraded its rating on Tata Consultancy Services to hold with a target price of Rs 564 in its October 31, 2008 research report. "For Q2'09, Tata Consultancy Services (TCS) registered modest earnings. Revenues went up by 8.5% sequentially, owing to a 6% increase in volume, a 3.2% depreciation of the rupee, and a marginal improvement (up 30 bps) in price realisation. At the current market price of Rs 537.45, the stock trades at forward P/E multiple of 10.4x and 9x for FY09E and FY10E, respectively. Our DCF valuation provides a fair price of Rs 564, assuming an 8% Rf, a 13.1% WACC and 5% terminal growth rate. Our target price provides an upside of 5% from the current level; thus, we downgrade our rating to Hold," says Indiabulls Securities' research report.
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